Bangladesh Bank: Boost lending to Small and Medium Scale Industries
Bangladesh Bank (BB) Governor Dr Salehuddin Ahmed Saturday said that a cut in bank interest rate would not ensure any increase in production in manufacturing industry.
"I have told the FBCCI (Federations of Bangladesh Chambers of Commerce and Industry) to look at other factors than only interest rate," Ahmed told a discussion on "Challenge in banking sector in 21st century: Bangladesh context" organised by Bangladesh Economic Association (BEA).
The governor urged the bankers to boost lending to small and medium scale enterprises. He also said the policies adopted for the banking sector lack in depth and are not people-friendly.
BEA president Prof Kholiquzzaman Ahmed chaired the discussion while its general secretary Prof Abul Barkat gave welcome address.
Barkat identified high interest rate as a major challenge for the growth of Bangladesh's industrialisation. He said the banks are supply centred and give concentration more on commerce than production.
The central bank governor said a reduced interest rate would not guarantee increase in production in manufacturing sector. He said there are some other factors that can increase production.
"Credit that is being given to private sector this time is not small... Rather the bankers should consider portfolio and quality of the projects before issuing loans," Dr Salehuddin Ahmed said.
He said the bankers have to increase their corporate social responsibility and service quality by giving less stress on outside displays.
BEA president Prof Kholiquzzaman Ahmed said Bangladesh is lagging behind not only in banking sector but also in other areas, including human resource development.
He emphasised strengthening monitoring in banking sector. Economists Dr Ashrafuddin Chowdhury and Toufiq Ahmed Chowdhury spoke among others at the function.
Source: The New Nation
